What to offer? Help!

Ollie_D

Hi all,

I am hoping to get some opinions and advice on a property I'm looking to place on offer on.

The property is - http://www.dezrez.com/DRApp/Search.ASP?WCI=Particular&WCE=002161380

Although it is out of my price range as listed, the EA suggested that it's over priced and could see the seller considering offers in the £110-115k range. My upper limit is around £110k, so was considering going in with an initial offer of £100k, considering the listing price, is this too low?

The house was bought in 2000 for £42,000 and I got the impression the seller is looking to get their money and move on. The Zoopla estimate, although I know not the most accurate, is £90,655.

Any advice or opinions would be appreciated.

Ollie

Caveat_Mortgagor

Ollie_D wrote: »

Hi all,

I am hoping to get some opinions and advice on a property I'm looking to place on offer on.

The property is - dezrez.com/DRApp/Search.ASP?WCI=Particular&WCE=002161380

Although it is out of my price range as listed, the EA suggested that it's over priced and could see the seller considering offers in the £110-115k range. My upper limit is around £110k, so was considering going in with an initial offer of £100k, considering the listing price, is this too low?

The house was bought in 2000 for £42,000 and I got the impression the seller is looking to get their money and move on. The Zoopla estimate, although I know not the most accurate, is £90,655.

Any advice or opinions would be appreciated.

Ollie

Are you 100% certain you want to buy a 1 bedder? It might suit you now, but what about in 3 or 5 years time?

I assume you are going to tie yourself into a 25 year financial commitment, if so, make sure you go into it with your eyes open.

For my money its the kind of place that only sells in a climbing market and would be one of the first to fall in a weak market and also fall the hardest.

Your area is about 10% down on peak across the board. The better properties will be dowen by less than that. Less saleable places like this will be nearer 20% down.

At peak a couple of these places sold for £120k. As such I would set a ceiling of £96k as a price for now and be prepared for the fact that in 2 years time it might only fetch £75k or £80k.

Ollie_D

Thank you for a comprehensive reply.

I'm constrained to the area I can get a property due to transport and unfortunately if I wish to purchase a freehold property, then my options are very limited.

Would I look silly going in with an offer of £90k? Is there a risk of the EA not thinking I'm serious?

chambta

Ollie_D wrote: »

Thank you for a comprehensive reply.

I'm constrained to the area I can get a property due to transport and unfortunately if I wish to purchase a freehold property, then my options are very limited.

Would I look silly going in with an offer of £90k? Is there a risk of the EA not thinking I'm serious?

They may just realise that you're very serious offering that.

Caveat_Mortgagor

Ollie_D wrote: »

Thank you for a comprehensive reply.

I'm constrained to the area I can get a property due to transport and unfortunately if I wish to purchase a freehold property, then my options are very limited.

Would I look silly going in with an offer of £90k? Is there a risk of the EA not thinking I'm serious?

From the link below......
the number of homeowners in financial distress – either in arrears, going through repossession or in forbearance – now stands at 1.2 million, or more than one in 10 of the current total of outstanding mortgages.

http://www.independent.co.uk/money/spend-save/simon-read-rising-poverty-worries-means-advice-is-crucial-2314442.html

Have a read. At least 1.2m mortgagors now regret allowing embarrassment to be an expensive sensitivity.

And thats despite record 300 year low interest rates.

The market is severely distorted at the moment. Price discovery is not happening as those 1.2m would normally be forced sales.

The choice you have to make is...... Are you confident that the banks will not reach the stage where they decide to remove their forebearance? Should that happen there is already a flood of 1.2m repo's that would cause panic sales and the graph in brit1234 post (#90) showing the anatomy of a bubble will come to life (see link) Fear, followed by capitulation and then despair.

https://forums.moneysavingexpert.com/discussion/3194430

Ollie_D

Update: I have just placed my first offer of £100k, I was aware that a previous offer of £95k had been turned down, unsurprisingly my offer was also turned down.

My limit for the property is £105k, the EA said the vendor was looking to get something closer to the asking price but was not willing to give an indication if I was miles off.

Would I be best to go straight back with another offer, or leave it a few days? Also should I increase by £1000 or just go straight to my max and tell them that's my final offer.

As always, any advice will be gratefully received.

somethingcorporate

Give them a week to wait on it. Go back in at £1k increments, wait a few days between each.

timbo58

I heard once that your first offer ought really to embarass you it should be THAT low!
It's firmly a buyers market at present and you should stress the 'no chain' aspect of your offer.

ukcarper

Looking at the Land Reg property in Devon is about the same price it was in 2006.
21 Ludwell Lane sold for £42k in 2000 and £114k in 2006 not sure if this helps.

Ollie_D

In my opinion (for what it's worth) the house would be worth about £115,000 when 'done-up' to a good standard inside, I think there is probably about £6k worth of worth including replacing of facias and soffets. So i think £105k is fair, just hope the seller and EA agree.

somethingcorporate

Sell it to them that way. I think it's always better to justify your offer so that the EA/vendor can understand your thinking. It means they should not dismiss it out of hand!